Palantir’s American exceptionalism has downsides

Palantir Technologies

14/08/2026 11:00

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.
By Jennifer Johnson
LONDON, Aug 14 (Reuters Breakingviews) - Palantir Technologies PLTR.O CEO Alex Karp seems to believe that Silicon Valley has built distraction devices and addictive apps for too long – and that it's time to get serious. In a 2025 book co-written with the group’s head of corporate affairs, Karp argues that U.S. tech giants must defend their nation. In doing so, they might preserve the "enduring yet fragile geopolitical advantage" enjoyed by the country and its Western allies. Yet this vision, along with Palantir's close Washington ties, hasn't landed well in Europe.
Beneath all the grandstanding is a rapidly growing American software business. Palantir posted nearly $2 billion of revenue in the second quarter, up 93% year-over-year. Its domestic business did the heavy lifting, growing 115%. Despite recent stock-market wobbles, the shares trade at a handsome 85 times expected earnings for the next 12 months, per LSEG. That’s arguably toppy for a business with restricted prospects outside of its home market.
Palantir's second-quarter figures imply that non-U.S. revenue grew just 34%. Based on analyst consensus forecasts, gathered by Visible Alpha, this geographic gap is no blip. Brokers are pencilling in a 66% compound annual growth rate for American revenue between 2025 and 2028, versus just 26% for the foreign business.
Non-U.S. sales will shrink to 13% of Palantir's top line by 2028, based on these forecasts, down from 26% last year. Other Big Tech businesses are more geographically balanced. International revenue accounts for roughly half of Microsoft's MSFT.O top line, and analysts expect the split to hold roughly constant in the coming years. U.S. defence prime Lockheed Martin LMT.N, meanwhile, is at just under 30% international revenue and will stay roughly in that ballpark, based on broker forecasts.
Muted expectations for Palantir's international business reflect growing political concerns –  especially in Europe, where the company's perceived closeness to the administration of President Donald Trump has a cost. As the bloc grows more conscious of digital sovereignty, it could be more difficult for Karp’s company to make serious inroads. France’s domestic intelligence agency has said it plans to replace Palantir’s tools with solutions made by ChapsVision, a homegrown rival. Meanwhile, a cross-party UK parliamentary committee has urged the government to trigger a break clause in Palantir's NHS data platform contract. Denmark and the Netherlands have publicly discussed sourcing or developing local alternatives to the Palantir systems they use in intelligence work.
Does this matter for Palantir's valuation? Perhaps not if U.S. revenue keeps storming ahead, but relatively slow international growth at least raises the bar at home. The greater danger is if investors conclude that much of Europe is not realistically part of the company's total addressable market, curtailing Palantir's long-term growth runway.
It's notable that there is no such stark geographical growth gap for other richly valued software groups like Snowflake SNOW.N and Cloudflare NET.N. In both cases, analysts expect the international units to grow as a percentage of revenue in the coming years, hitting 26% and 54% respectively by 2028, using Visible Alpha data. That makes Palantir's high valuation, and American revenue exceptionalism, all the more conspicuous.
     
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CONTEXT NEWS
Palantir Technologies raised its annual revenue forecast on August 3, following strong U.S. commercial demand for its data analytics software.
The company, ​which helps government and enterprise clients make decisions using their own data, now anticipates annual ​revenue between $8.15 billion and $8.16 billion – up from a prior forecast of $7.65 billion to $7.66 billion.

(Editing by Liam Proud; Production by Streisand Neto)
((For previous columns by the author, Reuters customers can click on JOHNSON/Jennifer.Johnson@thomsonreuters.com))